Debt Consolidation: What is it?

Written By Naazma Garcia
Sep 18, 2020


The easiest way to describe debt consolidation is simply combining lots of debts into one debt – usually through a loan. 

Some people will try to consolidate credit cards with another credit card. This approach usually just moves high interest debt around and puts you in a deeper debt hole making it even harder to get out of debt in the long run.

The purpose of consolidation is to get a lower interest rate so you can pay off your debts faster and for less money. Most people start looking for debt consolidation loans when they find themselves only being able to make minimum payments on their cards. This is what’s usually referred to as the minimum payment debt trap. 

Credit card minimum payments usually consist of mostly interest. Meaning your money really isn’t paying off much of the principal balance, it mostly goes towards interest. This means it could take years or even decades to get out of debt making interest-only payments. 

For debt consolidation to be effective as a debt relief strategy, you should close or stop using all credit cards while paying off your loan. Continuing to use credit cards after getting a loan will only worsen your debt situation. 

By stopping using credit cards and cutting living costs to put more money towards paying off the loan is the best path forward to finally living debt free. 

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We provide debt resolution services. Our clients who make all monthly program payments save approximately 40 – 50% of their enrolled debt (average of 43%) upon successful program completion, before program fees. Fees are based on a percentage of your enrolled debt at the time of starting the program and range from 15%-25% of your enrolled debt. Programs range from 20-48 months. Clients must save at least 25% of each debt due to an enrolled creditor before a bona fide settlement offer will be made. On average, clients receive their first settlement within 4-7 months of enrollment and approximately every 3-6 months thereafter from when the prior debt was settled. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Our program is not available in all states; fees may vary by state. Some programs may be offered through The Law Firm of Higbee & Associates d/b/a Advantage Law. The use of debt resolution services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Any amount of debt forgiven by your creditors may be subject to income tax. Clients may withdraw from the program at any time without penalty and receive all funds from their dedicated account, other than funds earned by the company or fees paid to third-party service providers, as may be applicable. Read and understand all program materials prior to enrolling. Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt relief companies. To determine the offers you may be eligible for, Americor conducts a “soft credit pull.” This credit pull does not impact your credit score, creditworthiness, or ability to obtain credit from other sources. The soft pull is not a tradeline entry, it does not report against your score and will only take a few minutes.

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